Opportunity and Obstacles Face Retailers Expanding Abroad
First, RetailWire looks at the mixed results retailers have had so far when setting up shop overseas. While it is likely "to become a necessity over the coming decades in order to grow", the process is filled with challenges - How far do you go? How quickly? How to launch and market successfully? Wal-Mart, for example, has succeeded in some countries, such as the UK, but much less so in other, such as Germany and South Korea. Tesco has leaped the pond from the UK to the US quite aggressively and have yet to truly prove themselves.
One point of view provided in the discussion notes that "one reason, at least, for the fact that several retailers have already failed big time stems from a belief in their own PR". They didn't "necessarily spend enough time understanding their own culture and why they are successful or understanding the culture of a new country. Furthermore, some have not yet maxed out their own markets."
Another POV - "before an execution can be successful, the retailer must have a profound working understanding of the culture of the market (or country) they are moving into. Do your homework upfront - learn markets on the markets' terms and you'll be alright. Charge in blindly because you're a success in your home country and the results are bound to be less than satisfactory."
Second, Internet Retailer looks at e-retailers looking to widen their international reach and acquire new revenue streams. By 2011 North America will represent only 17% of web users (down from 20% today), while the Asia-Pacific region will grow from 38% to 42% and Europe will decline from 28% to 26%.Among the tips provided in the article, based on the experiences of Wal-Mart, eBags and Timberland:
- “You don’t just translate your U.S. model overseas. he products local customers may expect to find in a store may be very different from what you sell in the U.S. The quality profile might be different, colors, assortments, categories all will vary. You need to listen to the customer and sell them products they want at the price they want.”
- Retailers must take into account local regulations, the reliability of delivery services and consumer attitudes (for example, 79% of Swedes will pay more for quality and convenience vs 55% of Germans.)
- Online payment methods and preferences vary, with many Europeans leery of entering credit card data online, or even using credit cards, while invoicing and cash on delivery are common in many markets.
- Europe may be a good place to start for online retailers because many stores are not open on Sundays or in the evening and may close during lunch, and outside of big cities, retail areas tend to be small.
- Paid search can prove very helpful in introducing the brand, along with PR and SEO.
Finally, here are some tips from MarketingSherpa on how to email response rates overseas (although the lessons are relevant to other marketing/advertising methods as well). The short version - translate emails into the recipient's native tongue and use regional translators to make sure the translation is correct and appropriate. And here's a Chief Marketer article that discusses how you can turn your translated materials into a competitive advantage.
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